BGC(US:BGC)2025-05-12 20:00PART I—FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS This section presents the unaudited condensed consolidated financial statements for BGC Group, Inc. as of March 31, 2025, and for the three months ended March 31, 2025 and 2024, including statements of financial condition, operations, comprehensive income, cash flows, and changes in equity, along with detailed notes Condensed Consolidated Statements of Financial Condition The company's total assets increased to $4.88 billion as of March 31, 2025, from $3.59 billion at December 31, 2024, primarily driven by a significant rise in receivables from broker-dealers, while total liabilities also increased to $3.74 billion from $2.51 billion, largely due to higher payables to broker-dealers and increased notes payable, and total equity grew to $1.14 billion from $1.08 billion over the same period Condensed Consolidated Statements of Financial Condition (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total assets | $4,884,476 | $3,591,967 | | Cash and cash equivalents | $966,357 | $711,584 | | Receivables from broker-dealers, clearing organizations, etc. | $1,279,425 | $365,490 | | Total liabilities | $3,741,525 | $2,512,728 | | Payables to broker-dealers, clearing organizations, etc. | $1,113,821 | $225,377 | | Notes payable and other borrowings | $1,688,640 | $1,337,540 | | Total equity | $1,142,951 | $1,079,239 | Condensed Consolidated Statements of Operations For the three months ended March 31, 2025, total revenues increased to $664.2 million from $578.6 million in the prior-year period, driven by higher commission revenues, while consolidated net income rose to $53.4 million from $49.0 million, and fully diluted earnings per share remained flat at $0.10 year-over-year Condensed Consolidated Statements of Operations (in thousands, except per share data) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Total revenues | $664,240 | $578,614 | | Commissions | $494,711 | $415,172 | | Total expenses | $586,522 | $548,068 | | Income from operations before income taxes | $79,978 | $71,098 | | Consolidated net income | $53,429 | $49,041 | | Net income available to common stockholders | $55,164 | $49,210 | | Basic earnings per share | $0.11 | $0.10 | | Fully diluted earnings per share | $0.11 | $0.10 | Condensed Consolidated Statements of Cash Flows For the three months ended March 31, 2025, net cash provided by operating activities was $0.8 million, a significant decrease from $28.1 million in the prior-year period, net cash used in investing activities was $16.6 million, and net cash provided by financing activities was $266.1 million, primarily due to the issuance of long-term debt, compared to $94.6 million used in the same period last year, resulting in a net increase in cash and cash equivalents of $252.5 million Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Category | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $839 | $28,092 | | Net cash provided by (used in) investing activities | $(16,594) | $(19,159) | | Net cash provided by (used in) financing activities | $266,055 | $(94,642) | | Net increase (decrease) in Cash and cash equivalents | $252,493 | $(87,788) | | Cash and cash equivalents at end of period | $985,766 | $585,108 | Notes to Condensed Consolidated Financial Statements The notes provide detailed explanations of the company's accounting policies and financial results, including the July 2023 Corporate Conversion to a Full C-Corporation structure and significant management changes in February 18, 2025, with Howard W. Lutnick stepping down as CEO and Chairman, and John A. Abularrage, JP Aubin, and Sean A. Windeatt appointed as Co-Chief Executive Officers, along with details on acquisitions, divestitures, related-party transactions with Cantor, debt structure, compensation plans, and segment performance - On July 1, 2023, BGC completed its Corporate Conversion from an 'Up-C' to a simplified Full C-Corporation structure, with BGC Group, Inc. becoming the new public holding company5053 - Following his confirmation as U.S. Secretary of Commerce, Howard W. Lutnick stepped down as Chairman and CEO on February 18, 2025. John A. Abularrage, JP Aubin, and Sean A. Windeatt were appointed as Co-Chief Executive Officers57 - Subsequent to the quarter end, on April 1, 2025, the company closed its acquisition of OTC Global for total consideration of $325.0 million. On April 2, 2025, BGC Group issued $700.0 million of 6.150% Senior Notes287288 Share Repurchase Activity (Q1 2025) | Period | Total Shares Repurchased (thousands) | Weighted-Average Price Paid per Share | | :--- | :--- | :--- | | Jan 2025 | 3,171 | $9.36 | | Feb 2025 | — | — | | Mar 2025 | 13 | $9.35 | | Total | 3,184 | $9.36 | - As of March 31, 2025, the company had $326.9 million remaining under its $400.0 million share repurchase authorization98 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Management discusses the financial results for Q1 2025, highlighting a 14.8% year-over-year increase in total revenues to $664.2 million, driven by strong performance in brokerage services, with the company's technology-driven Fenics businesses seeing revenues grow 15.6%, covering the business environment, recent acquisitions like OTC Global, the FMX venture, results by product line, and liquidity, which stood at $1.15 billion at quarter-end, along with capital deployment priorities including share repurchases and dividends Q1 2025 vs Q1 2024 Financial Highlights | Metric | Q1 2025 | Q1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenues | $664.2M | $578.6M | +14.8% | | Brokerage Revenues | $610.8M | $528.0M | +15.7% | | Income from operations before income taxes | $80.0M | $71.1M | +12.5% | | Fenics Revenues | $172.7M | $149.4M | +15.6% | Q1 2025 Brokerage Revenue Growth by Product (YoY) | Product | Revenue Change | Growth Rate | | :--- | :--- | :--- | | ECS | +$31.5M | +26.6% | | Rates | +$25.9M | +14.8% | | FX | +$26.0M | +31.0% | | Credit | -$0.7M | -0.7% | | Equities | +$0.1M | +0.1% | - The company's liquidity position increased by $248.3 million during the quarter to $1.15 billion as of March 31, 2025, primarily due to a $350.0 million draw on its Revolving Credit Agreement421 - FMX, the company's U.S. Treasury and futures marketplace, received a $171.7 million investment from strategic partners for a 25.75% stake, valuing the entity at $666.7 million306 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The company outlines its exposure to various market risks, including credit, principal transaction, market, operational, foreign currency, and interest rate risks, managing credit risk through approval and monitoring, mitigating market risk from unmatched principal transactions with strict limits and short holding periods, and quantifying foreign currency and interest rate risks, noting that a 10% strengthening of the U.S. dollar would negatively impact net income by approximately $4.8 million, and a 1% rise in interest rates would reduce net earnings by $0.5 million - The company's primary foreign currency exposure is the U.S. dollar versus the pound sterling and the euro. A hypothetical 10% strengthening of the U.S. dollar against both currencies would result in a negative impact on net income of approximately $4.8 million485 - A hypothetical 1% increase in interest rates would have caused a decline in consolidated net earnings of approximately $0.5 million for the three months ended March 31, 2025486 - Principal transaction risk arises from acting as a middleman in matched back-to-back trades. The company manages this by settling through recognized systems and generally avoids free-of-payment settlement476 ITEM 4. CONTROLS AND PROCEDURES Management, including the Co-Chief Executive Officers and Chief Financial Officer, evaluated the company's disclosure controls and procedures, concluding that these controls and procedures were effective as of March 31, 2025, with no changes made to the company's internal control over financial reporting during the quarter - The Co-Chief Executive Officers and the Chief Financial Officer concluded that BGC Group's disclosure controls and procedures were effective as of March 31, 2025487 - There were no changes in internal controls over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting488 PART II—OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS This section references Note 19 of the financial statements and the MD&A for details on legal proceedings, including a putative class action lawsuit filed by a stockholder against Cantor Fitzgerald, L.P. and Howard W. Lutnick concerning the Corporate Conversion, which was dismissed in its entirety by the court in April 2025 - A stockholder class action lawsuit challenging the fairness of the Corporate Conversion was dismissed in its entirety by the Delaware Court of Chancery on April 10, 2025442 ITEM 1A. RISK FACTORS The company states that there have been no material changes to the risk factors previously disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024 - There have been no material changes to the risk factors disclosed in the company's 2024 Annual Report on Form 10-K492 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS The company details its share repurchase activity for the quarter ended March 31, 2025, where under its authorized program, BGC repurchased a total of 3.184 million shares at a weighted-average price of $9.36 per share, with approximately $326.9 million remaining available under the $400.0 million repurchase authorization as of the end of the quarter Share Repurchases for Quarter Ended March 31, 2025 | Period | Total Shares Repurchased (thousands) | Weighted-Average Price Paid per Share | | :--- | :--- | :--- | | January 2025 | 3,171 | $9.36 | | February 2025 | — | — | | March 2025 | 13 | $9.35 | | Total | 3,184 | $9.36 | - As of March 31, 2025, the company had approximately $326.9 million remaining under its $400.0 million share repurchase authorization, which was re-approved on October 30, 2024494 ITEM 3. DEFAULTS UPON SENIOR SECURITIES The company reported no defaults upon senior securities during the period - None496 ITEM 4. MINE SAFETY DISCLOSURES This item is not applicable to the company - None497 ITEM 5. OTHER INFORMATION The company reported that No directors or executive officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the quarter ended March 31, 2025 - No directors or executive officers adopted or terminated a Rule 10b5-1 trading arrangement during the quarter498 ITEM 6. EXHIBITS This section lists the exhibits filed with the Form 10-Q, including indentures related to new debt, employment agreements for the new Co-CEOs, and certifications required by the Sarbanes-Oxley Act